General ACA Update – 1/2015

The key to the ACA (affordable care act) laws is based on being a resident of the U.S. (or not) for that tax year. Thus, what is shown on your annual tax that you are an expat does not have to follow U.S. federal laws on the ACA.

The updated law came out this past December, 2014. Thus, an expat who is residing more than 180 days (six months) outside the U.S. per calendar year is not subject to the ACA laws. (This has since changed for 2015/16. Please see the latest updates under ACA News Updates at https://www.gninsurance.com/aca-ppaca_how_does_it_affect_me/)

Expatriate Health Coverage Clarification Act of 2014 – Exempts expatriate health plans, employers acting as sponsors of such plans, and health insurance issuers providing coverage under such plans from the health care coverage requirements of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.

Deems expatriate health coverage to be minimum essential coverage for purposes of meeting the individual responsibility requirements of the Internal Revenue Code.

Declares that a qualified expatriate (and any dependent) enrolled in an expatriate health plan shall not be considered a U.S. health risk for purposes of assessing the annual fee on health insurance providers that provide health coverage to any U.S. health risk for any year after 2014.

Establishes a special rule for calculating the amount of this fee for calendar 2014.

Defines a “qualified expatriate” as: (1) a participant in a group health plan who is an alien residing outside the United States, a U.S. national, a lawful permanent resident, or a nonimmigrant about whom there is a good faith expectation of being abroad, in connection with his or her employment, for at least 180 days in a 12-month period; or (2) an individual who is abroad as a member of a group determined appropriate by the Secretary of Health and Human Services (HHS).

The whole penalty / tax are all based on you being an expat or not.

The U.S. government is going to be going back to the expat law, shown above, and may extend it from six months to under 12 months. That will be around 2016 for a start date of 1-1-2017.

Prior to this law, it used to be an expat was exempt if they stayed under 90 days a calendar year in the U.S. This fell in line with a U.S. resident having no ACA penalty for 90 days of a calendar year if they did not have an ACA policy. Now an expat can reside in the U.S. (as long as they state expat status in that tax year) under six months in the U.S. per calendar year and still be classified as an expat.